Why I’m Holding VOO in My Retirement Portfolio for Decades

I’ve been saving for retirement since my early 20s — not because I preferred making 401(k) contributions over taking vacations and hanging out with friends, but because I knew how important it was to start setting money aside for the future at a young age.

At this point, I’ve been building an investment portfolio for a pretty long time. And there’s one asset I’m happy to have in it — the Vanguard S&P 500 ETF (VOO).

Not only is it an asset that aligns with my long-term goals, but it’s an asset I think is suitable for pretty much anyone. So you may want to add it to your portfolio, too.

What’s the Vanguard S&P 500 ETF?

The Vanguard S&P 500 ETF is an exchange-traded fund that aims to match the performance of the S&P 500 index itself. That index consists of the 500 largest publicly traded companies by market capitalization.

Because an ETF like this is passively managed, it doesn’t come with hefty investment fees. In this case, you’re looking at an expense ratio of 0.03%.

What’s so special about the Vanguard S&P 500 ETF?

VOO isn’t the only S&P 500 ETF out there. Other big brokerages like Fidelity and Schwab offer similar funds that, like the Vanguard S&P 500 ETF, aim to match the S&P 500’s performance.

A lot of people like VOO because of its low expense ratio. But if you have another S&P 500 ETF you prefer, I’d encourage you to invest in it if that’s what you’re more comfortable with.

Why I’m holding VOO for the long haul

Any financial expert will tell you that when it comes to building a retirement nest egg, diversification is key. The nice thing about VOO is that you get instant diversification without having to go out and buy a bunch of different stocks.

I also like the fact that investing in VOO is easy. I don’t have to keep tabs on it like I do a typical company.

So why am I planning to keep holding VOO? I believe that any good investment should be held for years so you can benefit from share price growth. This is no exception.

I also think that VOO is a good investment to hold in retirement. The fact that it tracks the broad market mitigates some of the general risk of investing in stocks, and that’s something you need to be mindful of later in life.

VOO is not my only investment

Some people will put all of their money into an S&P 500 ETF, hold it for years, and call it a day. That’s not my strategy, though.

One drawback of VOO is that it won’t allow you to beat the broad market. And I have high hopes for my portfolio. If I want to beat the market, I can’t only invest in a fund that’s supposed to mostly be on par with the market.

It also doesn’t make sense for me to invest solely in VOO because I know how to research stocks and I’m willing to put in the time to keep tabs on my portfolio and rebalance as necessary. The reason I like VOO so much for my portfolio is that it simplifies a portion of it.

If you’re someone who wants a hands-off approach to investing, there’s nothing wrong with loading up on just VOO. But if you do, make sure to hold onto it for many years.

Stock values can rise and fall, and the same applies to VOO. Holding it for decades could increase your chances of meeting your retirement savings goals.